PSX witnesses subdued activities

Pakistan Stock Exchange (PSX) experienced a marginally subdued week, with authorities proposing amendments to tax bill including increased restrictions on non-tax filers, barring them from the purchase of securities, investment in mutual funds, properties and even suspending their bank accounts. National Assembly panel is currently reviewing the proposals.

Benchmark KSE-100 index declined by 392 points, down 0.3%WoW to close at 114,880 points on Friday, January 24, 2025. However, trading volumes grew as compared to last week, reaching 699 million shares, up 25%WoW.

Several important data points came in during the week, including a Current Account Surplus of US$582 million for December 2024, taking cumulative 1HFY25 balance to US$1.21 billion.

State Bank of Pakistan (SBP) raised PKR297 billion through T-Bills auction during the week, with 12-month yields dropping to 11.39%, down 41bps.

IMF revised Pakistan’s GDP growth forecast for 2025 to 3% and for 2026 to 4%, slightly downwards from previous projection.

On the external front, foreign exchange reserves held by SBP declined by US$276 million to US$11.5 billion. PKR weakened marginally against the greenback to close at PKR278.75 to a US$.

Other major news flow during the week included: 1) GoP agrees terms for US$1 billion loan with 2 Middle Eastern banks, 2) Saudi firm agrees to invest up to US$1 billion in Reko Diq project, 3) Foreigners withdraw US$38.5 million from T-Bills by January 10, 4) Pakistan to float US$200 million panda bonds in June, 5) World Bank to lend US$20 billion to Pakistan, 6) Petrol price increases, and 7) Urea sales increases by 58%YoY during CY24 to 6.6 million tons.

Fertilizer, Inv. Banks, and Textile weaving were amongst the top performing sectors, while E&P, Jute, & transport sectors were among the laggards.

Major net selling was recorded by Banks at US$14.1 million. Foreigners and companies absorbed most of the selling with a net buy of US$11 million.

Top performing scrips of the week were: FCCL, KTML, CNERGY, LOTCHEM, and MLCF, while laggards included: MARI, NRL, SAZEW, PGLC, and PIBTL.

According to Pakistan’s leading brokerage house, AKD Securities, PSX is expected to remain on positive trajectory, driven by an anticipated shift of funds from fixed income to equities amid falling fixed income yields.

The upcoming Monetary Policy Committee (MPC) meeting, scheduled on June 27, will remain a key focus.

Over the medium term, the KSE-100 index is anticipated to sustain its upward momentum throughout CY25, primarily driven by the strong profitability of fertilizer companies, higher sustainable ROEs of banks and improving cash flows of E&Ps and OMCs, benefitting from falling interest rates.

 

 

Iraq: Fire at Rumaila oilfield extinguished

A fire at Iraq's Rumaila oilfield was brought under control on Friday, the country's oil ministry said in a statement, adding that there were no serious injuries.

The fire started at a storage tank inside the oilfield's fifth gas station, "for unidentified technical reasons", the ministry said.

The station will operate again after checking all safety procedures and assessing the damages, the ministry added.

Three energy sources told Reuters that operations at the field had not been affected.

Two local oil workers suffered minor burn injuries, the sources said.

Production at Rumaila stands at about 1.45 million barrel per day (bpd), said two officials at the field.

 

Israel: Who will be new IDF chief?

Defense Minister Israel Katz intends to interview three candidates on Sunday to be the next IDF chief of staff. After IDF Chief of Staff Lt.-Gen. Herzi Halevi announced he would step down on March 06, 2025 it was expected that Katz would move quickly to select his replacement. Nevertheless, he threw a wrench into the works by adding dark-horse candidate Maj.-Gen. Tamir Yadai.

The Jerusalem Post and the other media outlets expected Defense Ministry Director-General Maj.-Gen. Eyal Zamir, who is a former deputy IDF chief of staff, and outgoing IDF Deputy Chief of Staff Maj.-Gen. Amir Baram to be on the shortlist of candidates.

The Post and the other media outlets expected that the third candidate would be OC Northern Command Maj.-Gen. Uri Gordon. Yadai, who recently retired from the IDF after serving as OC Land Forces Command, appears to have made the shortlist instead.

Yadai previously served as OC Central Command, OC Home Front Command, and commanded several different divisions after spending most of his career in the Golani Brigade.

He is seen as a dark-horse candidate because, unlike Zamir and Baram, he has not been the deputy IDF chief of staff, nor has he commanded the Northern or Southern commands, which are considered to be the most important field command roles.

Having led Northern Command to a sensational victory over Hezbollah, Gordon was viewed as a top potential candidate. Nevertheless, Katz might have viewed him as being too close to Halevi.

Zamir and Baram are still considered to be the most likely choices, with Zamir being the lead candidate.

Being that Yadai is somewhat of an outsider with the fewest ties to Halevi, if he were chosen, it could signal a reshuffle of the top echelons of the IDF. That might facilitate Prime Minister Benjamin Netanyahu’s desire to water down opposition to some of his policies.

 

 

Saudi Arabia promises US$600 billion to Trump

Saudi Arabian Crown Prince Mohammed bin Salman told President Donald Trump that the kingdom wants to put US$600 billion into expanded investment and trade with the United States over the next four years, the Saudi State news agency said early on Thursday.

In a phone call between the two leaders, the crown prince said the Trump administration's expected reforms could create "unprecedented economic prosperity", the state news agency reported.

The report said Saudi Arabia wants its investments to capitalize on these conditions. It did not detail the source of the US$600 billion, whether it would be public or private spending nor how the money would be deployed.

The investment "could increase further if additional opportunities arise", the agency quoted Bin Salman as telling Trump.

Trump fostered close ties with Gulf states including Saudi Arabia during his first term. The country invested US$2 billion in a firm formed by Jared Kushner, Trump's son-in-law and former aide, after Trump left office.

Trump said following his inauguration on Monday that he would consider making Saudi Arabia his first destination for a foreign visit if Riyadh agreed to buy US$500 billion worth of American products, similar to what he did in his first term.

"I did it with Saudi Arabia last time because they agreed to buy US$450 billion worth of our product. I said I'll do it but you have to buy American product, and they agreed to do that," Trump said, referring to his 2017 visit to the Gulf kingdom

 

 

Hezbollah and Amal agree to join Salam

Before the end of the 60-day Lebanon-Israel ceasefire agreement, and a week after Judge Nawaf Salam was assigned to form a new cabinet, meetings with parliamentary blocs are intensifying to dispel any obstacles, one of which is the Lebanese Forces’ insistence on monopolizing the ministries of foreign affairs and energy.

Reportedly, Samir Geagea, head of the Lebanese Forces (4 ministries), has also sent MP Melhem Riachi to meet Prime Minister-designate Nawaf Salam and know the details of the cabinet lineup. 

Salam informed Riachi that he was determined to strengthen his relationship with Nabih Berri, Speaker of the Parliament, based on a promising future and putting national interests above anything else.

For his part, President Joseph Aoun, despite announcing that he is not seeking any ministry for his team, insists on granting him the power to place a “veto” on the names nominated for the sovereign ministries of foreign affairs, defense and interior.

According to sources, the prime minister-designate is in talks with figures who are supposed to have chances to hold ministerial positions; they say he is seeking to form a “technocratic-political” cabinet.

Salam insists on not excluding any political stakeholders, so he intends to appoint representatives of these factions to ministerial portfolios, provided that they: 1) do not hold senior positions in these factions and 2) sign a pledge not to run in the upcoming parliamentary elections.

Given that the Interior Ministry is the Sunni share, there is a deep disagreement between Sunni figures in this regard, especially as the minister will supervise the upcoming parliamentary elections, scheduled for May 2026. 

Although Salam did not make any promise to appoint any Shiite figure outside the circle of the Hezbollah-Amal duo, he did not contact any of the so-called “Shiite opposition”, who saw an opportunity to find a foothold in the government. However, following the two meetings that brought Salam together with the duo, their US-prompted dream has faded.

The prime minister-designate further met with Mohammad Raad, head of the Loyalty to the Resistance bloc; Hussein Khalil, the political assistant to the Hezbollah Secretary-General, and MP Ali Hassan Khalil, a representative of the Amal Movement. 

During the two meetings, Salam spoke at length about the Lebanese political system since independence from the French occupation in the early fifties, until the Taif Agreement, which ended the 1975-1990 civil war, stressing his view not to exclude any political component. 

The duo expressed their objection to the violations that accompanied his nomination, but showed their willingness to overcome that in order to preserve Lebanon's interests during this critical period.

In addition to the Ministry of Finance, the duo demanded a significant service ministry, such as the Ministry of Public Works or the Ministry of Health, expressing their complete readiness to cooperate with Salam.

Meanwhile, it is not clear whether the duo will be the ones to propose the names of the five ministers for the prime minister-designate to choose from or vice versa, knowing that the duo’s priority is the mechanism for governance and addressing urgent issues in the next phase.

Since the signing of the Taif Agreement, successive governments have made it a priority for the ministerial statement to clearly state the right of the Lebanese to resist and liberate the occupied territories. Therefore, one of the duo’s priorities is for the current ministerial statement to stipulate the righteousness of the resistance.

In light of the anti-Hezbollah team’s biased interpretations of UN Resolution 1701, the duo is keen for the ministerial statement to express the government’s commitment that President Joseph Aoun would conduct a comprehensive national dialogue regarding the Resistance movement’s weapons along the general national defense strategy.

 

Trump fires Biden appointees and Hook

According to The Hill, US President Donald Trump announced the firing of four high-profile presidential appointees just after midnight Tuesday. These include a top envoy to Iran during his first term, Brian Hook, and retired Gen. Mark Milley, whom Trump tapped as Joint Chiefs chair in 2018.

Trump wrote on Truth Social that fired Hook from the Wilson Center; Milley from the National Infrastructure Advisory Council; celebrity chef and humanitarian José Andrés from the President’s Council on Sports, Fitness and Nutrition; and Keisha Lance Bottoms, the former mayor of Atlanta, from the President’s Export Council.

“Our first day in the White House is not over yet! My Presidential Personnel Office is actively in the process of identifying and removing over a thousand Presidential Appointees from the previous Administration, who are not aligned with our vision to Make America Great Again,” Trump posted on Truth Social just past midnight Tuesday. 

“Let this serve as Official Notice of Dismissal for these 4 individuals, with many more, coming soon,” Trump said before listing off the four officials in the post that ended with “YOU’RE FIRED!” 

Milley, the former chair of the Joint Chiefs of Staff, was given a preemptive pardon by former President Biden in the final hours of his presidency. Milley has at times forcefully criticized Trump, and Trump has suggested he should be court-martialed and executed.

The retired general’s portrait at the Pentagon, hung in the Joint Chiefs hallway, was taken down Monday less than two weeks after it was put up.

Hook, who served under former Secretary of State Mike Pompeo during Trump’s first term, was an Iran hawk who supported sanctions the Trump administration imposed on Iran. 

Bottoms was a senior adviser on Biden’s reelection campaign, after deciding against running for a second term as Atlanta’s mayor.

Andrés, the founder of World Central Kitchen, has questioned whether Trump can carry out his ambitious deportation plans, and seems to be considering a future in politics himself.

In a flurry of executive orders Trump signed Monday, he also ordered federal workers return to the office five days a week.

 

Trump's decisions good or bad

In a nearly 30-minute speech, Donald Trump called for “change” after he claimed a litany of national failures under Biden’s watch. His first standing ovation came after announcing that he would declare a national emergency at the Southern border, a move that will allow the Pentagon to deploy troops to the region.

The declaration would also free up resources to build a wall at the US-Mexico border, an effort he was forced to abandon at the end of his last administration.

Trump later said he would reinstate service members who were fired for refusing the COVID-19 vaccine and give them full back pay.

The GOP has long vowed to reinstate troops fired for refusing the vaccine. They slipped in the 2024 defense authorization bill a requirement for the Pentagon to consider reinstatement for that reason.

Trump also said he would stop “radical political theories” and “social experiments” for members of the armed forces. “It’s going to end immediately,” he said.

Trump vowed to “build the strongest military the world has ever seen.”

In addition, he said the US will once again become a “growing nation,” vowing to take back the Panama Canal during his inauguration speech.

The newly sworn-in president added that he wants his legacy to be that of a “peacemaker and unifier” as he touted the release of Israeli hostages a day before his inauguration.

One notable omission from his inaugural speech was the Russia-Ukraine war, soon to enter its third year. Trump has promised to end the conflict war even before he was sworn in.

The immediate visible effects of the new Trump administration could be found at the Pentagon, where a portrait of retired Gen. Mark Milley, the former chair of the Joint Chiefs of Staff who has feuded in highly public spats with Trump, was taken down on Monday. No reason was given for the change.

Trump has clashed with Milley over several national security issues during his first time in the White House, with Trump once suggesting that the four-star general deserved to be executed. Milley, who retired in 2023, has called Trump a fascist.

In his last few hours in the Oval Office on Monday, Joe Biden issued pre-emptive pardons to Milley and several other people, which he said were not an admittance of guilt but were issued for their service.